US Oil Reserve Falls to 340 Million Barrels as Iran War Drives Fuel Price Surge

Q: Can releasing stored oil truly fix prices when a critical waterway like the Strait of Hormuz remains closed?

No. Releasing oil from the Strategic Petroleum Reserve can ease a price spike, but it cannot fully restore normal prices if the Strait of Hormuz stays effectively closed. The core problem is scale. The strait carries roughly one-fifth of global oil and a major share of LNG. Current estimates in the supplied material point to a supply loss of about 11 million barrels a day. By comparison, the U.S. SPR’s maximum drawdown rate is about 4.4 million barrels a day, and the current U.S. release is spread over months. That can cushion the shock, not replace the missing flow. Past evidence also shows limits. Previous SPR releases lowered U.S. gasoline prices by only about 13 to 42 cents a gallon. Analysts say much of the effect is psychological: the announcement can calm markets temporarily, but it does not solve a prolonged physical disruption in global shipping and supply. The International Energy Agency’s coordinated release of 400 million barrels can help stabilize markets and buy time. It may reduce panic, support refinery supply, and soften inflation pressure. But even the IEA’s own framing is that stock releases reduce pain; they are not a substitute for reopening the waterway. If Hormuz remains shut, prices would still be driven by the global shortage, shipping risk, insurance costs, and uncertainty. In that scenario, stored oil is an emergency bridge, not a lasting fix. A durable price correction requires the resumption of safe oil flows through the strait.

3 articles · Updated · Bloomberg · Jun 15

340 million barrels remained in the US Strategic Petroleum Reserve on Monday, leaving the emergency stockpile at its lowest level since 1983.
The drawdown comes as the Trump administration moves to complete a 172 million-barrel release aimed at cooling gasoline prices that have surged during the war in Iran.
The reserve was created after the 1970s Arab oil embargo, underscoring how deeply the latest intervention has cut into a buffer meant for supply shocks.